Governmental Affairs News

Friday, March 27, 2015

Legislators leave for two-week break

Legislators are on a two-week break, starting today. Accordingly, MRA will not send a Government Affairs News update until after legislators return on April 14. In the meantime, updates will be sent on an as-needed basis.

MRA providing background on retail issues
Legislators have been back in Lansing for nearly three months without much new legislation to show for it – by design. With nearly one-third of the 148 representatives and senators being new to the Capitol, there is a lot to learn. The new legislative leaders are making sure caucus members get as much education on the issues as possible.

For example, in addition to holding dozens of get-acquainted meetings with first-term lawmakers, Michigan Retailers Association has given an overview of the retail industry to the House Commerce Committee. MRA also made a presentation on retail pharmacies, together with the National Association of Chain Drug Stores, to the House Health Policy Committee (see article below). And MRA provided an overview of the credit card payment system to the House Financial Services Committee.

MRA also has been participating in several workgroups on electronics recycling, biosimiliars, optional service animal credentials, secondhand dealer requirements (see article below), and local pre-emption of wage and benefit policies. While there may not be a lot of pending legislation, there is a lot waiting in the wings.

Subcommittees reject proposed fee increases

House and Senate budget subcommittees reported initial recommendations to the full Appropriations committees this week. The House and Senate Appropriations Licensing and Regulatory Affairs subcommittees rejected the governor’s executive budget request to increase liquor license fees by 50 percent (HB 4106 and SB 127). 

The House and Senate Appropriations Agriculture and Rural Development subcommittees also rejected the proposed 300 percent retail food establishment license fee increase in HB 4094 and SB 115. The department had proposed a phased-in approach to lessen the immediate burden on businesses. The subcommittees also rejected that proposal. While the Senate did not include any increase for retail food establishments, the House did include a placeholder to continue discussion of the proposed increases.

House Health Policy hears 'Drug Day' presentation
MRA made a presentation on retail pharmacies, together with the National Association of Chain Drug Stores, to the House Health Policy Committee on March 17 as part of the committee’s “Drug Day.” Committee members received an overview of pharmacy procedures, the role community pharmacy plays in providing convenient healthcare, and highlights of the challenges and issues facing pharmacies. Several member companies were also on-hand to share information about their business models.

The emerging market of biologic and biosimiliar drugs was a hot topic at the hearing. MRA and NACDS communicated our shared belief that pharmacists should be able to substitute an interchangeable biosimiliar approved by the FDA the same way a generic can be substituted for a brand name drug unless a physician has indicated “dispense as written.”

Legislators are working on draft legislation that would allow substitution of interchangeable biosimiliars similar to generic drugs, but there is also draft legislation that would require physician notification for any substituted interchangeable biosimiliars. The notification requirement is troubling because by imposing new, previously unseen requirements of recordkeeping and physician notification on these drugs, it could discourage the market demand and limit the economic value for manufacturers. If a limited market exists, manufacturers will not invest the time and money to produce interchangeable biosimiliar drugs, and customers will pay the price, literally, of higher cost drugs with no affordable generic or interchangeable version available.

Hearing reviews secondhand dealer requirements
The House Financial Services Committee heard testimony on Wednesday from MRA and several retailers of gently used clothing and sporting goods on the challenges the Secondhand Dealer and Junk Dealer law places on their businesses. Secondhand shop retailers testified in addition to pawnbrokers in advance of legislation, HB 4266-4268, that would create a statewide system and add several new tracking and reporting categories for pawnbrokers, jewelry dealers and secondhand dealers.

Current law requires retailers selling low-dollar, secondhand items to do extensive tracking of every item that comes into their stores, collect intrusive information – including fingerprints from sellers – and hold items for a minimum of 15 days. Most secondhand dealers receive hundreds, if not thousands, of new items each week in the $5-35 range. There are currently no exemptions in the law, even for $1 tank tops or 50-cent golf balls.

MRA continues to work with the bill sponsor to include language to exempt or limit the tracking and reporting requirements for a retail store or business that sells primarily secondhand clothing, children’s furniture or equipment, children’s toys, musical instruments and sporting goods. We are urging the exemption to be included before a committee vote. The bills are scheduled for testimony on April 15, after legislators return from their spring break.

Other important items to note:

  • Electric choice/competitive bidding: Legislation to require competitive bidding for any new electric capacity and to allow the Michigan Public Service Commission to raise the cap on electric choice was introduced on Wednesday. The bill, SB 235, was referred to the Senate Energy and Technology Committee.

  • Powdered alcohol ban: Legislation banning the sale of powdered alcohol was introduced in both the House and Senate on Thursday. The legislation, HB 4416 and SB 240, has much bipartisan support and passed almost unanimously last year. The language was stripped out of the bill last year before the governor signed it. The bills were referred to the House and Senate Regulatory Reform Committees.

  • 7-day workweek ban: Legislation that would prohibit an employer from requiring an employee to work seven days a week was introduced on Thursday in the Senate as SB 243. The bill would require employers to allow for a day of rest each week as well as provide meal breaks during certain periods. The bill was referred to the Senate Commerce Committee.

  • Sick leave for victims: HB 4414 would require employers to permit use of sick leave to address sexual assault, domestic violence or stalking. The bill was introduced and referred to the House Commerce and Trade Committee on Thursday.

  • Fingerprint requirement: The Senate voted 33-4 on Thursday to approve SB 195, which would remove the fingerprint requirement for the application of a new pharmacy, manufacturer or wholesale distributor license.

  • Animal adoption "Logan's Law": Legislation to prohibit animal abusers from adopting animals was reintroduced as SB 219-220 and HB 4353 and 4355. The bills require animal shelters or animal protection agencies to check a statewide database of individuals convicted for animal abuse crimes before finalizing a pet adoption. The legislation includes language MRA worked on last year to exempt pet shops that allow adoption events on site from checking a database before performing any adoptions. 

  • E-cigarettes: SB 231, introduced on Tuesday, would regulate the sale and use of e-cigarettes by minors. The bill would add e-cigarettes or vapor products to the signage that is already required by existing law under the Youth Tobacco Act.

  • Fireworks: Recently introduced legislation, HB 4367, would allow local governments to set limitations on the use of consumer fireworks except for midnight to 8:00 a.m. on July 3-5. Under current law, local governments can only set limits on use of fireworks between midnight to 8:00 a.m. on the day before, the day after and the day of a national holiday. The bill was referred to the House Regulatory Reform Committee.

  • Wage garnishment: The Senate on Thursday unanimously approved HB 4119 and 4120, which provide employers with some protection from the wage garnishment process. The bills were enrolled and will be presented to the governor, who is expected to sign them.


  • Core charge sales tax exemption: HB 4372 would exempt the sales tax on the difference between the sale price of an auto part or battery and the core charge (a recycling fee, deposit or disposal fee) that is returned or exempted if the old part is exchanged for a new part. Old parts are called “cores” and can be used in the rebuilding of refurbished or repaired parts for sale. HB 4372 was referred to the House Tax Policy Committee, where another similar bill, HB 4269, is also awaiting a hearing.

  • Court of Claims: The Senate approved legislation, SB 100, on March 19 that would eliminate the requirement for a taxpayer to prepay the tax, penalty and interest before bringing a claim before the Court of Claims. The bill is now before the House Tax Policy Committee.

  • Retail fraud cost recovery: SB 191, to allow for the recovery of law enforcement costs related to retail fraud cases, was unanimously approved by the Senate Judiciary Committee on Thursday. The bill now heads to the full Senate for consideration. 

  • School start date: HB 4396, which would allow schools to choose when to start their academic year – including dates before Labor Day – was introduced on Wednesday and referred to the House Education Committee. The bill has a fair amount of bipartisan support. The tourism industry and MRA were behind the successful push years ago to require classes to start after Labor Day and will likely oppose any attempts to start school prior to summer’s final three-day weekend.

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